In December 1985 a neonate was transferred to a Yorkshire Regional Neonatology Unit (RNU) from a neighbouring hospital and was subsequently found to be colonized with a 'methicillin-resistant' strain of Staphylococcus aureus (MRSA). Spread of the MRSA was controlled by routine cross-infection methods. The RNU was not closed to new admissions, the economic cost of control measures was small and no neonatal death was attributable to MRSA infection. Eradication of the MRSA from the RNU was associated with a decline in frequency of coagulase-negative staphylococci (CNS) from blood cultures, but the overall frequency of positive blood cultures did not decline and there was a rise in frequency of isolation of Gram-negative bacterial species. The decline in frequency of CNS isolates from blood cultures may have resulted from a reduction in the level of cross-colonization of neonates with antibiotic-resistant CNS strains and also increased usage of erythromycin and vancomycin.